The license does not deny others the right to build on the software. The license is a fork of the AGPL and adds a clause that requires you to open source not only software, but supporting software that is used to run the service. One could argue that this license would result in more publicly available software, not less.
Here is the clause for reference:
> If you make the functionality of the Program or a modified version available to third parties as a service, you must make the Service Source Code available via network download to everyone at no charge, under the terms of this License. Making the functionality of the Program or modified version available to third parties as a service includes, without limitation, enabling third parties to interact with the functionality of the Program or modified version remotely through a computer network, offering a service the value of which entirely or primarily derives from the value of the Program or modified version, or offering a service that accomplishes for users the primary purpose of the Software or modified version.
Right. But the point here wasn't that Amazon is doing something wrong in respect to the license. They release their modifications to Elastic, and they could theoretically release whatever "functionality" is required to "interact with the functionality of the Program".
What was being argued was that it was ethically wrong of Amazon to engage in this business without some sort of blessing from (and, one would imagine, revenue sharing with) the original developers. Under that argument, their misdoing isn't releasing too little, but doing the work in the first place.
Something like the AGPL can absolutely be a tool for more FOSS in the world. But I think there was two things being argued here.
Here is the clause for reference:
> If you make the functionality of the Program or a modified version available to third parties as a service, you must make the Service Source Code available via network download to everyone at no charge, under the terms of this License. Making the functionality of the Program or modified version available to third parties as a service includes, without limitation, enabling third parties to interact with the functionality of the Program or modified version remotely through a computer network, offering a service the value of which entirely or primarily derives from the value of the Program or modified version, or offering a service that accomplishes for users the primary purpose of the Software or modified version.